The vision of the founders of our higher education system provides a significant challenge today. Liverpool University's Victoria building has a plaque that reads: "For advancement of learning and ennoblement of life the Victoria building was raised by men of Liverpool in the year of Our Lord 1892."

These aspirations, enshrined in the charters of many universities and shared by research organisations, provide us with a benchmark for assessing the extent to which today's institutions match their ideals. Their founders were particularly interested in their civilising influence, how they could boost economies and transform people within their communities and beyond.

The question today is how far should academics and researchers extend their civic and civilising influence beyond their students and the research they pursue.

At one level, the £12bn a year in public funding for higher education and research institutions has created a bigger obligation to engage than ever before, in particular with the many taxpayers who do not directly benefit. More profoundly, engaging with the public is vital today because of the complexity of the modern world. Everyone's lives are influenced by science and technology. Issues such as global warming, GM crops and new medical treatments provide daily headline news.

Universities and research organisations lead in increasing understanding of topics of public interest, through teaching, research and scholarship. Surveys carried out by Mori show that scientists on the whole are trusted, and trust is actually rising. But researchers, funders and policy-makers also need to listen to the public through dialogue to ensure that research and teaching remain in tune with society's needs.

Over the past two decades, public engagement activities have been increasingly supported by the research councils, learned societies, the government and the Wellcome Trust. The Higher Education Funding Council for England has put increasing sums into supporting knowledge transfer and community-based activities, as well as schemes to encourage young people to study strategic subjects such as languages, physics and chemistry.

But Research Councils UK and Hefce, working in association with the Scottish and Welsh higher education funding councils and the Wellcome Trust, have concluded that there is still a significant gap in the way higher education connects with the public. This was most recently highlighted by a Royal Society survey which found that the research-driven culture in universities and colleges and pressure to publish, far outweigh public engagement work and media engagements.

There were, however, some encouraging signs. Nearly half the respondents said that they would like to spend more time engaging with the non-specialist public. There is also evidence from other sources that much public engagement work tends to be small, fragmented or of short duration and not embedded within institutional strategies.

We as funding bodies have responded by uniting for the first time with an initiative to set up collaborative beacons for public engagement, including one national coordinating centre. Jointly, we are providing up to £8m over four years to support this pilot initiative, which seeks to encourage culture change within institutions across all subject areas (see hefce.ac.uk).

We expect higher education institutions to submit proposals involving other providers such as research institutes, museums, galleries, charities, science centres, zoos, arts festivals, business and industry. The outcome will be better coordination, increased capacity and sharing of best practice, while embedding these activities within the institutions' culture.

Our economy, our civic values, our social coherence, and our universities themselves, will benefit as we refresh that 19th-century vision of higher education engagement for the 21st century.

David Eastwood is chief executive of the Higher Education Funding Council for England